Communication and Learning

Luca Anderlini, Dino Gerardi and Roger Lagunoff

The Review of Economic Studies, 2012, vol. 79, issue 2, 419-450

Abstract: We study strategic information transmission in an organization consisting of an infinite sequence of individual decision-makers. Each decision-maker chooses an action and receives an informative but imperfect signal of the once-and-for-all realization of an unobserved state. The state affects all individuals' preferences over present and future decisions. Decision-makers do not directly observe the realized signals or actions of their predecessors. Instead, they must rely on cheap-talk messages in order to accumulate information about the state. Each decision-maker is therefore both a receiver of information with respect to his decision and a sender with respect to all future decisions. We show that if preferences are not perfectly aligned, "full learning" equilibria--ones in which the individuals' posterior beliefs eventually place full weight on the true state--do not exist. This is so both in the case of private communication, in which each individual only hears the message of his immediate predecessor, and in the case of public communication, in which a decision-maker hears the message of all his predecessors. Surprisingly, in the latter case full learning may be impossible even in the limit as all members of the organization become perfectly patient. We also consider the case where all individuals have access to a mediator who can work across time periods arbitrarily far apart. In this case, full learning equilibria exist. Copyright 2012, Oxford University Press.

Date: 2012
References: Add references at CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://hdl.handle.net/10.1093/restud/rdr031 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Communication and Learning (2010)
Working Paper: Communication and Learning (2008)
Working Paper: Communication and Learning (2008)
Working Paper: Communication and Learning (2008)
Working Paper: Communication and Learning (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:restud:v:79:y:2012:i:2:p:419-450

Access Statistics for this article

The Review of Economic Studies is currently edited by Thomas Chaney, Xavier d’Haultfoeuille, Andrea Galeotti, Bård Harstad, Nir Jaimovich, Katrine Loken, Elias Papaioannou, Vincent Sterk and Noam Yuchtman

More articles in The Review of Economic Studies from Review of Economic Studies Ltd
Bibliographic data for series maintained by Oxford University Press ().